BILL ANALYSIS SB 1402 Page 1 Date of Hearing: August 4, 2010 ASSEMBLY COMMITTEE ON APPROPRIATIONS Felipe Fuentes, Chair SB 1402 (Dutton) - As Amended: June 24, 2010 Policy Committee: Natural ResourcesVote:7-0 Judiciary 10-0 Urgency: Yes State Mandated Local Program: No Reimbursable: No SUMMARY This bill requires the Air Resources Board (ARB) to include specified information in its written communications alleging that a penalty for air pollution violation will be or could be imposed. Specifically, this bill: 1)Requires ARB to include the following information as part of its written communications that the board or another entity will or could impose an administrative or civil penalty for air quality violation, and to make the information available to the public: a) How the penalty amount was determined; b) The provision of law under which the penalty is being assessed and an explanation of why that provision is most appropriate; and, c) Whether the penalty is being assessed for a provision of law that prohibits a specified level of emissions and, if so, a quantification of the pollution emitted in violation of that level. 2)Directs ARB to report annually to the Legislature and governor on imposition of air pollution penalties. 3)Requires ARB to publish, by March 11, 2011, a policy for air pollution penalties. FISCAL EFFECT SB 1402 Page 2 Costs of an unknown amount, potentially in excess of $150,000 per year, for up to one position at ARB to include specified information in written communications, to make it available to the public, and to update and publish penalty policy and report to the Legislature and governor. (Air Pollution Control Fund) COMMENTS 1)Rationale . The author describes entities subject to ARB regulation as having expressed concern over the lack of information on how ARB determines and assesses penalties. The author also notes complaints about a lack of consistency in penalty amounts and justifications. The author intends this bill to: (a) ensure that this information is provided to alleged air pollution violators and is publicly available, (b) codify some of ARB's improvements to the transparency of its penalty policies, (c) provide legislative oversight, and (d) ensure penalties are assessed consistently by establishing a written penalty policy. 2)Background . Under current law, the ARB and/or local air pollution control districts are authorized to impose civil or administrative penalties for a variety of violations of state air pollution laws and regulations. Administrative penalties of up to $100,000 may be assessed for certain violations. ARB and the courts are required to consider several factors when determining the amount of an administrative or civil penalty - including the harm to the public, the compliance history of the defendant, preventative efforts made by the defendant, and other factors. Fine and penalty revenues are generally deposited in the APCF, where they are available, upon appropriation of the Legislature, for environmental cleanup, abatement, or pollution prevention, or in the General Fund. 3)Support . This bill is supported by numerous industry groups subject to regulation by ARB and/or local air districts, who contend ARB oftentimes fails to provide adequate information regarding air quality violations and inconsistently imposes penalties for violation. 4)Opposition . The Department of Finance was opposed to an earlier version of this bill, which Finance asserts is unnecessary because it duplicates actions ARB already is undertaking administratively. Finance also notes that the SB 1402 Page 3 bill contains no new funding to pay for the workload it creates, which Finance estimates will cost approximately $500,000 a year-a cost estimate substantially greater than the cost estimate provided by this analysis-to ensure penalty communications are adequately detailed. It is not known whether Finance remains opposed to the latest version of the bill, the provisions of which are similar to the version of the bill Finance opposed. Analysis Prepared by : Jay Dickenson / APPR. / (916) 319-2081